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Negotiations for return of J&K Hydel Projects

Background to the RTI Intervention

Readers may recollect my email alert disseminated in April 2016 about the NHPC's earnings from hydel projects in J&K. NHPC supplied figures under the RTI Act to show that it had earned more than Rs. 194 billion (almost USD 3 billion at current exchange rates) by selling electricity generated from the rivers of J&K between 2001-2015. Since then, NHPC has added several more millions to its coffers earned from the rivers in J&K.

Against this RTI, NHPC also supplied a copy of the Memorandum of Understanding (MoU) that the J&K Govt. entered into with the Central Govt. in July 2000 (see pages 5-7 after opening this link). Dr. Farooq Abdullah,then Chief Minister of J&K signed it on behalf of J&K, Mr. P. R. Kumaramangalam, the Minister for Power signed on behalf of the Central Govt. The MoU clearly states that seven hydel projects namely, those at Kishanganga, Uri-II, Bursar, Sewa-II, Pakal Dul, Nimmo Bazgo and Chutak in J&K would be transferred to NHPC for a period of 10 years for funding, execution and operation. Both J&K Govt. and the Central Govt. agreed in the MoU that they would work out a mutually "acceptable methodology" for handing over these projects back to J&K separately (see para #2c of the MoU). Although the media in J&K and elsewhere had been talking about "buyback" of these projects, the MoU only talks about "handover" of these projects to J&K.

The RTI application and the first appeal

Like I had reported initially in April 2016, my second RTI intervention was to get the details of the negotiations for the return of the hydel projects to J&K. As this RTI application was filed before NHPC supplied me a copy of the MoU, I had used the phrase "buy back" (instead of "return") based on media reports on the subject. I sought the following information from the Ministry of Power under the RTI Act (see 2nd attachment):

"1)A clear copy of all correspondence received from the Government of Jammu and Kashmir regarding the buy back of hydro power projects situated in that State, till date;

2)A clear copy of all replies sent to the Government of Jammu and Kashmir in relation to the correspondence referred to at para #1 above, till date;

3)A clear copy of all documents relating to the feasibility of the proposal of buy back of the projects mentioned at para #1 above, including reports of any expert committee available on record; and

4)A clear copy of all file notings held as on date relating to the queries described at paras #1-3 above."

To cut a long story short, the CPIO of the Ministry of Power simply transferred the RTI application to NHPC. Both the CPIO and the first appellate authority (FAA) of NHPC rejected the information request under Section 8(1)(d) of the RTI Act. The CPIO supplied an opinion from a Chief Engineer (Projects) -IV of NHPC stating that the issue of negotiations had not yet been resolved (see page 4 of the 2nd attachment). This runs counter to the claims made by the Union Minister for Power (past and present incumbent) that the Interlocutors' recommendation to return hydel projects to J&K had been rejected (see 3rd attachment).

In my first appeal, I argued that the CPIO's reply was not detailed enough as he had only named an exemption without explaining how disclosure would negatively affect any important public interest. Further, the CPIO had only referred to "Section 8(d)" of the RTI Act which is not even a valid number for any clause under the RTI Act.

The FAA gave a more detailed order holding that NHPC being a listed company, the information sought was sensitive and "disclosure would lead to unwanted speculations and confusion among shareholders and "affect the commercial confidence" of NHPC. Hence the claim to Section 8(1)(d) of the RTI Act (see pages 13-14 of the 2nd attachment).

The second appeal and CIC's reasoning

In July 2016, I submitted a second appeal against the NHPC's reasoning before the CIC on the following grounds:

a) that the NHPC is the recipient of the RTI application by way of transfer from the Union Power Ministry under Section 6(3) of the RTI Act. As it accepts the fact that it holds the information, it cannot also claim to be the 'third party' in the same case. Section 8(1)(d) of the RTI Act is only meant to protect the interests of "third parties" who are not themselves recipients of the RTI application in question. In this case, the Respondent Public Authority- the NHPC, could not also be the third party to the very RTI application on which it was required to make a decision. I pointed out that the Delhi High Court had rejected the claims of Air India to being a third party in its own case in the matter of Virender Singh Dabad vs The Executive Director etc., WP(C) 2141/2011. This decision was later upheld by a Division Bench of the same High Court in 2012;

b) that almost 90% of the shares of NHPC are held by the President of India and public financial institutions (see shareholder breakup in 2016 as available on the NHPC website on page 28 of the 2nd attachment). So the argument that disclosure would lead to speculation is not tenable as an overwhelming majority of shares are held by the Government. There were simply not enough shares freely available for trading to drive the prices down through speculation;

c) that the issue of return/buyback of hydel projects was an emotive issue widely discussed in J&K and across the country- so there was immense public interest in favour of disclosure; and

The CIC heard my second appeal in September 2017, more than a year after its submission.

On the date of hearing, I submitted an additional set of arguments stating that the information sought was related to people's right to water which is an internationally recognised basic human right. I handed over a copy of the General Comment of the Committee on Economic, Social and Cultural Rights (CESCR)- the treaty monitoring body under the International Covenant on Economic, Social and Cultural Rights (the Covenant). In 2002, CESCR recognised every human being's right to access information about water issues as an essential component of the basic human right to water guaranteed under the Covenant. The right to electricity is not yet an internationally recognised basic human right. So I had to use the right to water as the basis of my arguments. India acceded to the ICESCR in 1979 and the rights enumerated in it are recognised under the Protection of Human Rights Act, 1993 [Sections 2(d) and 2(f)]. India is duty bound to give effect to these rights, including the right to access information about water, I argued at the hearing.

In its order issued on 9th October, 2017, the CIC merely cited some of my arguments without making any effort to balance them against the NHPC's claim of confidentiality. Further, the CIC did not rule on the public interest angle and maintained a strange silence about the application of Section 8(2) which authorises it to direct disclosure of even exempt information in the larger public interest. In fact Section 8(1)(d) also contains a provision for disclosure of this information in the larger public interest. CIC did not even examine these clauses before arriving at its decision. Instead, the CIC ruled that disclosure would not serve any public interest!

Inexplicably, the CIC ignored the Delhi High Court's ruling on Section 8(1)(d) that I had cited in my arguments. Instead the CIC cited a 2009 Full Bench decision (in the matter of Milap Choraria vs CBDT), where CBDT- the Respondent Public Authority was treated as a "third party" in its own case and access to information was denied (see decision in the 4th attachment). The CIC ruled that disclosure would affect the commercial confidence of NHPC upholding its argument that transparency would lead to speculation and confusion among its shareholders.

What is problematic with the CIC's reasoning? Is it contempt of court?

1) Treating the Respondent Public Authority as the "third party": With deepest respect to its wisdom, it must be said that the CIC's decision to treat the NHPC - the Respondent Public Authority in this case, as a 'third party' also, runs contrary to the law laid down by the Hon'ble Delhi High Court in Virdender Singh Dabad. That case also arose from a challenge to the CIC's earlier decision to treat Air India as both Respondent Public Authority and "third party" in the same case. The High Court set aside that decision of the CIC. The High Court's finding lays down the rule of statutory interpretation in crystal clear terms. As the Delhi High Court is a constitutional court which is often called on to review the CIC's decision under Article 226 of the Constitution, the CIC is duty bound to follow this precedent instead of the patently erroneous interpretation that it has been dishing out in multiple cases. By ignoring the case law despite being formally presented with it, the CIC's action may amount to contempt towards a constitutional court's ruling.

Further, the scheme of "parties" to an RTI application is easily explained using commonsense.In relation to every RTI application, the applicant is the 'first party'. The public authority which receives the information request and makes a decision on it through its CPIO, is the 'second party'. It cannot also be a third party in its own case. Further, the NHPC has only appointed CPIOs and FAA's as one entity. If the NHPC is a public authority separate from its CPIOs and FAA then who are they working for? Section 2(n) of the RTI Act, no doubt, includes a "public authority" within its definition but that applies to any other public authority which may fall within the circumstances mentioned in Section 11 of the RTI Act. So if any other public sector organisation had given the information I sought, to the NHPC, in confidence, it could have been treated as a "third party". That is not the case at all in the current RTI intervention. Unfortunately, treating one public authority as both "Respondent" and "third party" in relation to one RTI application leads to an absurdity in law. If this becomes a popular trend, any senior officer in a public authority can claim to be a 'third party' to every RTI application and frustrate every information request by objecting to disclosure.

2) Harm test not applied in accordance with the language of the law: Even worse is the CIC's lack of appreciation of the language of Section 8(1)(d) of the RTI Act which reads as follows:

"Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen,-

X X X X

(d) information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;" [emphasis supplied]

The harm test contained in Section 8(1)(d) is of a much higher threshold than the excuse given by NHPC and accepted by the CIC to prevent disclosure of details of the negotiations for return of the hydel projects. NHPC merely stated that its commercial confidence would be "affected" by disclosure. It did not explain how its competitive position would be harmed or prejudicially affected by transparency- this is the requirement in Section 8(1)(d) of the RTI Act. During the hearing in the matter the CIC also did not press upon NHPC to discharge its burden of proving under Section 19(5) of the RTI Act that disclosure would adversely affect its competitive position. There was no mention from the NHPC either orally or in writing as to who its competitors were that would take undue advantage of the information when disclosed. With the deepest respect to the wisdom of the CIC it must be said that its interpretation is both untenable and lacking in rigour.

Make J&K more economically self-reliant by returning hydel projects

It may be noted here that NHPC generatesclose to 30% of the hydel power from plants situated in J&K.. A bulk of its revenues come from J&K's hydel projects. While 12% of the power generated is supplied to J&K free of cost, the State Government is required to buy at commercial rates, between 19-20% of the power so generated by NHPC to meet local demands. All of this is publicly available data. Nevertheless, negotiations for the return of the hydel projects are being conducted in secrecy even as the Ministry claims that the Government has decided not to return the projects to J&K. By becoming more transparent about these negotiations, NHPC could shrug off the tag of "Modern-day East India Company" given by its critics in J&K.

Raucous panelists on some TV News Channels frequently point a denigrating finger towards J&K about its dependency on Central financial support for survival. They would do well to recognise that the truth is the very opposite of what they are claiming. Every day, every hour, every minute, all States in Northern India, including Rajasthan and Delhi draw on the electricity produced by J&K's hydel projects. NHPC earns its profits from the power sold to these States. If even a portion of these revenues were to be rerouted to J&K, the State's dependence on Parliament for budgetary support would be reduced considerably. This seems to be the basis of the Interlocutors' 2012 recommendation for returning hydel projects to J&K.

I am requesting readers to go through the attached documents to fully appreciate my views. This is not a case of a crying "the grapes are sour" because I have lost the case. In my humble opinion, the basis on which the CIC has arrived at its decision is simply not tenable in law and it is unfortunately becoming regular practice. I am willing to hand over these papers to any public spirited lawyer who would like to challenge pro bono, the CIC's decision in the High Court. This is a public interest matter (unlike what the CIC stated in its order). Secrecy only breeds suspicion about the true intentions of authorities at all levels.